10/12/2004 - Library House, the independent research house for the technology investment community, in association with business and financial advisers, Grant Thornton, announced the publication of the 2004 Cambridge Cluster report. In its second year of publication, the report confirms that Cambridge-based technology companies as a "cluster" have attracted more investment than any other technology centre in the UK and Europe over the last eighteen months.
Furthermore, the study confirms that overall the Cambridge Cluster - a group of leading technology and innovation companies - has rebounded from the downturn in investment earlier and more strongly than the UK in general and the rest of Europe. The Cambridge Cluster report is the only study on the development and significance of Europe's leading technology cluster of its kind - no technology cluster, not even Silicon Valley, has ever been researched in this detail. Previous reports on the Cambridge Cluster have been based on statistical extrapolation or anecdotes and speculation.
In the first half of 2004, the Cambridge Cluster secured more than 25 per cent of the UK's venture capital investments and more than 8 per cent of the European total by value. Average investment levels by round are between 57 per cent and 100 per cent higher in the Cambridge Cluster than in the rest of the UK and Europe. Moreover, the report concludes that whereas investment levels remained constant in the Cambridge Cluster (with the exception of the dip in 2003), total European investment decreased by approximately 80 per cent over the last four years.
Commenting on the results, Doug Richard, Chairman of Library House said, "There has been a lot of anecdotal evidence that funding levels and investment have seen significant recovery this year. However, as the only study that actually evidences hard facts and figures on the rebound in investment through solid research, we are excited to confirm that funding levels are indeed back to those similar to 1999.”
The report, which compiled information about some 890 innovation and technology-based firms in Cambridge found that up to September 2004, funding in Cluster companies is already close to the funding level for the whole of 2003. The Cluster attracted GBP 150 million of inward investment in 2003 and the forecasted total amount of funding to be raised in 2004 is approximately GBP 200 million.
Success in securing outside investment is closely related to an innovation-based company's ability to generate strong revenues and to operate profitably. In 2003, revenues generated by companies in the Cluster amounted to GBP 4.6 billion, representing a year-on-year increase of more than 13 per cent.
The confidence of investors in the area has been underpinned by a number of strong exits, totaling more than USD 500 million in the first 8 months of 2004 and by the return of the IPO, including Amino Communications and Cambridge Silicon Radio.
Wendy Hart, National Head of Technology for Grant Thornton concluded, "The Cambridge Cluster is clearly going from strength to strength. The research shows that thanks to these companies' traditional values of upholding scientific and technological knowledge, an ever expanding base of experienced entrepreneurs, business executives and talented staff, investors will continue to turn to the Cambridge Cluster as one of the hottest centres in the world to find good deals. This makes Cambridge a good model for other aspiring technology centres throughout Europe to emulate."
About Library House
Library House discovers, monitors and measures innovation companies as they progress from initial investment to final preparation for IPO or trade sale. Library House provides investors, corporations, universities and government the most complete view and direct access to the innovation companies in the UK and Europe through its database, reports, events and analysis. www.libraryhouse.net
About Grant Thornton
Grant Thornton UK LLP is a leading financial and business adviser to mid corporate businesses and their owners with 34 local offices. We are the UK member firm of Grant Thornton International, one of the world's leading organisations of accounting and consulting firms providing a comprehensive range of business advisory services in over 110 countries bringing together 22,000 personnel in around 600 offices worldwide. Each member and correspondent firm in Grant Thornton International is a separate independent national firm. Although these firms are not members of one international partnership or otherwise legal partners with each other, they share a commitment to common standards and methodologies and provide the same high quality service to their clients wherever they choose to do business.
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